County Says Resort Tax Money Will Pay Ocean Center Bills

May 11, 1986|By Rick Tonyan of The Sentinel Staff

If a plan for refinancing Volusia County's convention center in Daytona Beach becomes reality, the county's resort tax revenue should keep the building financially healthy for the foreseeable future, a county financial study shows.

And, unless there is a severe depression in the county's tourist industry, a 4-year-old agreement that would commit Daytona Beach money to the center never will be used, said county finance director Al Gault.

The building, called the Ocean Center, opened last October and by the time its first year of operation ends, it should have brought in about $4.2 million from ticket sales, concessions, rents and other forms of revenue, the study shows.

Center expenses may outrun revenues by as much as $736,620, but the county has about $500,000 left from the money set aside to construct the building. That will help pay off the deficit, Gault said.

He said the county's resort tax, a 2 percent charge on hotel, motel and other short-term accommodations, should more than make up the rest of the deficit. The tax is supposed to both pay off the center's construction bonds and finance operations.

Next year, the $500,000 left over from construction won't be in the budget to help pay the operating deficit, but the county should have plenty of excess resort tax money, Gault said.

He said tax revenue has been increasing by at least 5 percent annually since it was imposed in 1978 and should continue rising as long as tourists keep coming to the county's motels and hotels. The tax will bring in about $2.85 million this budget year.

Gault said the plan for refinancing the center, which already has been approved by the county council, should cut $180,000 per year from the $2.3 million in resort taxes that now go to pay off bond issues for center construction.

Those issues were floated at 9.4 percent interest. Reduced interest rates now give the county a chance to pay off the earlier bonds with a new issue at 7.24 percent interest.

When interest rates were escalating before the center was built, financial projections showed that the resort tax might not raise enough money to both pay off the building's construction bonds and make up the operating deficit.

To keep plans for the center afloat, the city and county in 1982 signed an agreement to commit as much as $3.1 million annually in Daytona Beach utility franchise fee money to the project.